Empowered by Debt A collective debt resistance movement can have real power in the fight against unfair practices

The Debt SketchbookYES! Illustration by Edel Rodriguez

Is Our $11.85 Trillion Burden Just the Leverage We Need?

Charles Eisenstein

The Debt SketchbookYES! Illustration by Edel Rodriguez

The legitimacy of a given social order rests on the legitimacy of its debts. Even in ancient times this was so. In traditional cultures, debt in a broad sense — gifts to be reciprocated, memories of help rendered, obligations not yet fulfilled — was a glue that held society together. Everybody at one time or another owed something to someone else. Repayment of debt was inseparable from the meeting of social obligations; it resonated with the principles of fairness and gratitude.

Charles Eisenstein is the author of Sacred Economics and The More Beautiful World Our Hearts Know Is Possible.

The moral associations of making good on one’s debts are still with us today, informing the logic of austerity as well as the legal code. A good country, or a good person, is supposed to make every effort to repay debts. Accordingly, if a country like Jamaica or Greece, or a municipality like Baltimore or Detroit, has insufficient revenue to make its debt payments, it is morally compelled to privatize public assets, slash pensions and salaries, liquidate natural resources, and cut public services so it can use the savings to pay creditors. Such a prescription takes for granted the legitimacy of its debts.

On the household level, the same logic applies. If you owe money, you’d better work harder, spend less, sell off assets, and organize your future around debt repayment. Because, after all, you owe the money fair and square. Right?

Today a burgeoning debt resistance movement draws from the realization that many of these debts are not fair. Most obviously unfair are loans involving illegal or deceptive practices — the kind that were rampant in the lead-up to the 2008 financial crisis. From sneaky balloon interest hikes on mortgages, to loans deliberately made to unqualified borrowers, to incomprehensible financial products peddled to local governments that were kept ignorant about their risks, these practices resulted in billions of dollars of extra costs for citizens and public institutions alike.

A movement is arising to challenge these debts. In Europe, the International Citizen debt Audit Network (ICAN) promotes “citizen debt audits,” in which activists examine the books of municipalities and other public institutions to determine which debts were incurred through fraudulent, unjust, or illegal means. They then try to persuade the government or institution to contest or renegotiate those debts. In 2012, towns in France declared they would refuse to pay part of their debt obligations to the bailed-out bank Dexia, claiming its deceptive practices resulted in interest rate jumps to as high as 13 percent. Meanwhile, in the United States, the city of Baltimore filed a class action lawsuit to recover losses incurred through the Libor rate-fixing scandal, losses that could amount to billions of dollars.

This is part of a context of unjust economic, political, or social conditions that compels the debtor to go into debt. When that injustice is pervasive, aren’t all or most debts illegitimate?

And Libor is just the tip of the iceberg. In a time of rampant financial lawbreaking, who knows what citizen audits might uncover? Furthermore, at a time when the law itself is so subject to manipulation by financial interests, why should resistance be limited to debts that involved lawbreaking? After all, the 2008 crash resulted from a deep systemic corruption in which “risky” derivative products turned out to be risk-free—not on their own merits, but because of government and Federal Reserve bailouts that amounted to a de facto guarantee.

From the Editors: The Power of Debt

Christa Hillstrom and James Trimarco

It’s not enough to seek relief from debt. We need to rethink the entire system that moves it. Credit is key to building things that last — homes, businesses, and organizations — but when a small group holds the strings, they tend to use that power to enrich themselves. We, instead, can use the power of our shared debts to enact change.

“The debts worth having, it seems to me, are the ones that allow us to be more fully ourselves, that we honor with our freedom rather than our servitude.” —Nathan Schneider

From the Editors: The Power of Debt

Christa Hillstrom and James Trimarco

Nathan Hornes gets a lot of calls from collection agencies — sometimes four a day. Hornes, a 25-year-old who shares a small Los Angeles apartment with his mom, has more than $60,000 in student loans, racked up while he earned a degree in business management from Everest College, run by the umbrella group Corinthian Colleges.

But he isn’t sending checks anymore.

Hornes aspired to open a music school for inner-city kids, and he knew he’d never make the money for that working in fast food. But the education he received at Everest was a joke: When Hornes interviewed for a position as a bank teller, the hiring manager laughed at his degree. He found himself back in fast food, paying $647.91 a month for a worthless diploma from a college that has since gone out of business.

So Hornes and 14 classmates started the “Corinthian 15,” a group that kicked off a debt strike last December — the first in U.S. history. Their story made headlines at CNN and The Washington Post, and the group was invited to the Department of Education to help negotiate a mass loan forgiveness deal for Corinthian students. Today, they’re the Corinthian 200 — and together, they’re challenging the legitimacy of their debts (for the full story, visit yesmagazine.org/hornes).

When debt gets out of hand, it becomes something to be ashamed of, a burden we carry alone, and a weakness that strips our power away. Millions of us — from students graduating with an average of $33,000 in loans to homeowners trying to keep up payments on mortgages worth more than their houses, to people who take out payday loans to cover utility bills — are so emotionally and financially drained that debt is the last thing we want to think about.

The Corinthian students show how debt can be a source of power. The financial sector depends on debtors’ payments for its survival. What if we stopped seeing our nearly $12 trillion in household debt as a burden and saw it as a bargaining chip instead? As Charles Eisenstein says, even the smallest challenge to the debt system can have radical implications because “if one debt can be nullified, maybe all of them can.”

But it’s not enough to seek relief from current debt. We need to rethink the entire system that moves money and credit through our society. Credit is key to building things that last — homes, businesses, and organizations — but when a small group of creditors holds the purse strings, they tend to use that power to enrich themselves.

Thankfully, our communities can provide credit too, and a growing assortment of peer-to-peer lending systems and zero-interest small loans is getting the right amounts into the right hands at the right time. Community-based credit not only avoids throwing debtors into lifelong financial crisis but knits families, neighbors, and political allies more closely together. This is what we mean when we talk about “good debts.”

For many of us, debt plays such a negative role in our lives that it can be difficult to imagine what a positive relationship to debt might look like. The stories we’ve collected in this issue show how our shared debts can be a source of solidarity and people power. That’s what we need to find a way out from under debt and, more than that, to fundamentally change our economic system.

Christa Hillstrom and James Trimarco are editors of yesmagazine.org, where they’ll be continuing our coverage of debt throughout the fall.

The perpetrators of these “financial instruments of mass destruction” (as Warren Buffett labeled them) were rewarded while homeowners, other borrowers, and taxpayers were left with collapsed asset values and higher debts.

This is part of a context of unjust economic, political, or social conditions that compels the debtor to go into debt. When that injustice is pervasive, aren’t all or most debts illegitimate? In many countries, declining real wages and reduced public services virtually compel citizens to go into debt just to maintain their standard of living. Is debt legitimate when it is systemically foisted on the vast majority of people and nations? If it isn’t, then resistance to illegitimate debt has profound political consequences.

This feeling of pervasive, systemic unfairness is palpable in the so-called developing world and in increasing swaths of the rest. African and Latin American nations, southern and eastern Europe, communities of color, students, homeowners with mortgages, municipalities, the unemployed … the list of those who strain under enormous debt through no fault of their own is endless. They share the perception that their debts are somehow unfair, illegitimate, even if there is no legal basis for that perception. Hence the slogan that is spreading among debt activists and resisters everywhere: “Don’t owe. Won’t pay.”

Challenges to these debts cannot be based on appeals to the letter of the law alone when the laws are biased in favor of creditors. There is, however, a legal principle for challenging otherwise legal debts: the principle of “odious debt.” Originally signifying debt incurred on behalf of a nation by its leaders that does not actually benefit the nation, the concept can be extended into a powerful tool for systemic change.

Odious debt was a key concept in recent debt audits on the national level, most notably that of Ecuador in 2008 that led to its defaulting on billions of dollars of its foreign debt. Nothing terrible happened to it, setting a dangerous precedent. Greece’s Truth Commission on Public Debt is auditing all of that nation’s sovereign debt with the same possibility in mind. Other nations are likely taking notice because their debts, which are obviously unpayable, condemn them to an eternity of austerity, wage cuts, natural resource liquidation, privatization, etc., for the privilege of staying in debt (and remaining part of the global financial system). In most cases, the debts are never paid off. According to a report by the Jubilee Debt Campaign, since 1970 Jamaica has borrowed $18.5 billion and paid back $19.8 billion, yet still owes $7.8 billion. In the same period, the Philippines borrowed $110 billion, has paid back $125 billion, and owes $45 billion. These are not isolated examples. Essentially what is happening here is that money — in the form of labor power and natural resources — is being extracted from these countries. More goes out than comes in, thanks to the fact that all these loans bear interest.

What debts are “odious”? Some examples are obvious, such as loans to build the infamous Bataan Nuclear Power Plant from which Westinghouse and Marcos cronies profited enormously but which never produced any electricity, or the military expenditures of juntas in El Salvador or Greece. But what about the huge amount of debt that financed large-scale, centralized development projects? Neoliberal ideology says those are to the great benefit of a nation, but now it is becoming apparent that the main beneficiaries were corporations from the same nations that were doing the lending.

The rising tide of debt cannot be explained by a rising tide of laziness or irresponsibility. The debt is systemic and inescapable. It isn’t fair, and people know it.

Moreover, the bulk of this development is geared toward enabling the recipient to generate foreign exchange by opening up its petroleum, minerals, timber, or other resources to exploitation, or by converting subsistence agriculture to commodity agribusiness, or by making its labor force available to global capital. The foreign exchange generated is required to make loan payments, but the people don’t necessarily benefit. Might we not say, then, that most debt owed by the “developing” world is odious, born of colonial and imperial relationships?

The same might be said for municipal, household, and personal debt. Tax laws, financial deregulation, and economic globalization have siphoned money into the hands of corporations and the very rich, forcing everyone else to borrow in order to meet basic needs. Municipalities and regional governments now must borrow to provide the services that tax revenues once funded before industry fled to the places of least regulation and lowest wages in the global “race to the bottom.” Students now must borrow to attend universities that were once heavily subsidized by government. Stagnant wages force families to borrow just to live. The rising tide of debt cannot be explained by a rising tide of laziness or irresponsibility. The debt is systemic and inescapable. It isn’t fair, and people know it. As the concept of illegitimate debts spreads, the moral compulsion to repay them will wane, and new forms of debt resistance will emerge. Indeed, they already are in places most affected by the economic crisis, such as Spain, where a strong anti-eviction movement challenges the legitimacy of mortgage debt and has just gotten an activist elected mayor of Barcelona.

As the recent drama in Greece has shown us, though, isolated acts of resistance are easily crushed. Standing alone, Greece faced a stark choice: either capitulate to the European institutions and enact austerity measures even more punishing than those its people rejected in the referendum or suffer the sudden destruction of its banks. Since the latter would entail a humanitarian catastrophe, the Syriza government chose to capitulate. Nonetheless, Greece rendered the world an important service by making the fact of debt slavery plain, as well as revealing the power of undemocratic institutions such as the European Central Bank to dictate domestic economic policy.

Besides direct resistance, people are finding ways to live outside the conventional financial system and, in the process, prefigure what might replace it. Complementary currencies, time banks, direct-to-consumer farm cooperatives, legal aid cooperatives, gift economy networks, tool libraries, medical cooperatives, child care cooperatives, and other forms of economic cooperation are proliferating in Greece and Spain, in many cases recalling traditional forms of communalism that still exist in societies that aren’t fully modernized.

Debt is a potent rallying issue because of its ubiquity and its psychological gravity. Unlike climate change, which is easy to relegate to theoretical importance when, after all, the supermarkets are still full of food and the air conditioner is still running, debt affects the lives of growing numbers of people directly and undeniably: a yoke, a burden, a constant constraint on their freedom. Three-quarters of Americans carry some form of debt. Student debt stands at more than $1.3 trillion in the United States and averages more than $33,000 per graduating student. Municipalities around the country are cutting services to the bone, laying off employees, and slashing pensions. Why? To make payments on their debts. The same is true of entire nations, as creditors — and the financial markets that drive them — tighten their death grip on southern Europe, Latin America, Africa, and the rest of the world. Most people need little persuading that debt has become a tyrant over their lives.

What is harder for them to see, though, is that they could ever be free of their debts, which are often described as “inescapable” or “crushing.” That is why even the most modest challenges to debt legitimacy, such as the aforementioned citizen audits, have revolutionary implications. They cast into question the certainty of debt. If one debt can be nullified, maybe all of them can — not only for nations but for municipalities, school districts, hospitals, and people too. That’s why the European authorities made such a humiliating example of Greece — they needed to maintain the principle of inviolability of debt. That’s also why hundreds of billions of dollars were used to bail out the creditors who made bad loans in the runup to the 2008 financial crisis, but not a penny was spent bailing out the debtors.

No street protests are necessary, no confrontations with riot police, to stop payment on a credit card or student loan. The financial system is vulnerable to a few million mouse clicks.

Not only does debt have the potential to be a rallying point of near-universal appeal, it also happens to be a unique political pressure point. That’s because the results of mass debt resistance would be catastrophic for the financial system. The Lehman Brothers collapse in 2008 demonstrated that the system is so highly leveraged and so tightly interconnected that even a small disruption can cascade into a massive systemic crisis. Moreover, “won’t pay” is a form of protest easily accessible to the atomized digital citizen who has been sundered from other forms of collective association; arguably, it is the only form of digital action that has much real-world impact. No street protests are necessary, no confrontations with riot police, to stop payment on a credit card or student loan. The financial system is vulnerable to a few million mouse clicks. Herein lies a resolution to the dilemma posed by Silvia Federici in the South Atlantic Quarterly: “Instead of work, exploitation, and above all ‘bosses,’ so prominent in the world of smoke stacks, we now have debtors confronting not an employer but a bank and confronting it alone, not as part of a collective body and collective relation, as was the case with wage workers.” So let’s organize and spread awareness. We needn’t confront the banks, the bond markets, or the financial system alone.

What should be the ultimate goal of the debt resistance movement? The systemic nature of the debt problem implies that none of the policy proposals that are realistic or reachable in the present political environment are worth pursuing. Reducing rates on student loans, offering mortgage relief, reining in payday lending, or reducing debt in the Global South might be politically feasible, but by mitigating the worst abuses of the system, they make that system slightly more tolerable and imply that the problem is not the system — we just need to fix these abuses.

Conventional redistributive strategies, such as higher marginal income tax rates, also face limitations, mostly because they don’t address the deep root of the debt crisis: the slowdown of economic growth worldwide, or, as a Marxist would put it, the falling return on capital. More and more economists are joining a distinguished lineage that includes Herman Daly, E.F. Schumacher, and even (though this is little known) John Maynard Keynes to argue that we are nearing the end of growth — primarily, but not only, for ecological reasons. When growth stalls, lending opportunities disappear. Since money is essentially lent into existence, debt levels increase faster than the supply of money required to service them. The result, as Thomas Piketty described so clearly, is rising indebtedness and concentration of wealth.

The aforementioned policy proposals have a further defect as well: They are so moderate they have little potential to inspire a mass popular movement. Reduced interest rates or other incremental reforms are not going to arouse an apathetic and disillusioned citizenry. Recall the Nuclear Freeze movement of the 1980s: Widely decried as naïve and unrealistic by establishment liberals, it generated a vocal and committed movement that contributed to the climate of opinion behind the START agreements of the Reagan era. The economic reform movements need something equally simple, graspable, and appealing. What about the cancellation of all student debt? What about a jubilee, a fresh start for mortgage debtors, student debtors, and debtor nations?

The problem is that canceling the debts means erasing the assets upon which our entire financial system depends. These assets are at the basis of your pension fund, the solvency of your bank, and grandmaïs savings account. Indeed, a savings account is nothing other than a debt owed you by your bank. To prevent chaos, some entity has to buy the debts for cash, and then cancel those debts (in full or in part, or perhaps just reduce the interest rate to zero). Fortunately, there are deeper and more elegant alternatives to conventional redistributive strategies. Iïll mention two of the most promising: “positive money” and negative-interest currency.

Both of these entail a fundamental change in the way money is created. Positive money refers to money created directly without debt by the government, which can be given directly to debtors for debt repayment or used to purchase debts from creditors and then cancel them. Negative-interest currency (which I describe in depth in Sacred Economics) entails a liquidity fee on bank reserves, essentially taxing wealth at its source. It enables zero-interest lending, reduces wealth concentration, and allows a financial system to function in the absence of growth.

Radical proposals such as these bear in common a recognition that money, like property and debt, is a sociopolitical construct. It is a social agreement mediated by symbols: numbers on slips of paper, bits in computers. It is not an immutable feature of reality to which we can but adapt. The agreements that we call money and debt can be changed. To do so, however, will require a movement that contests the immutability of the current system and explores alternatives to it.

Charles Eisenstein is the author of Sacred Economics and The More Beautiful World Our Hearts Know Is Possible.

Me, Refuse to Pay? A recent college graduate considers her role in changing an unfair system. Are debtors a new kind of cultural hero?

Yessenia Funes

The Debt SketchbookYES! Illustration by Steve Brodner

Every college semester, I filled out my financial aid application, hoping I would receive more grants than loans. Either way, my fate was sealed: I was a college student in the United States, so debt was inevitable.

Yessenia Funes is an assistant editor at YES! Magazine and a recent graduate of the State University of New York at Plattsburgh. Follow her on Twitter @yessfun.

The latest figures from the U.S. Department of Education are for 2012-13, my second year in college. That year, tuition, room, and board for undergraduates averaged $15,022 a year at public institutions, $39,173 at private nonprofit institutions, and $23,158 at private for-profit institutions. Most students spend at least four years in college. No aspiring college graduate I know has $60,000 lying around for four years of public college — let alone almost three times that for a private one. This has led to one of the United States’ most crippling debts: $1.3 trillion worth of it.

As for me? I’m below average — but not by far. With $23,000 of student debt, I barely missed the latest average in 2013 of $28,400. But what can people do about this? Debt burdens more than just college students. It troubles the minds of homebuyers and credit card owners. It cripples entire nations.

A class I took last year addressed an option. My professor, Richard Robbins, a distinguished professor of anthropology, proposed a debt strike. He’s calling for at least 20 to 25 percent of people to ignore their October 2016 debt bills. “Not pay my bills?” I thought. It sounded radical. But as he discusses in his forthcoming book, Debt as Power, co-authored with Tim Di Muzio, it’s not that radical. He says he has a solution to our debt problem. The question is: Will I — or better yet, we — take a chance on it?

First off, I had to understand his idea more clearly, so I sat down to have a conversation with him. “You’ve got to use the only power that debtors have: simply to withhold their debt payments,” Robbins said. How is not paying our bills an act of power, though? It sounds more like an act of cowardice. After Robbins compared the debt strike to a labor strike, an act of civil disobedience, it made more sense.

In a labor strike, employees refuse to work. They could, but they’re saying they won’t until their demands are met. The factory can’t run until its employees return. The employer needs the strikers, so it’s forced to hear them out. Well, creditors need debtors too. They rely on us. They give us money so we can make them even more money. They don’t lend us money to be good Samaritans. They are running a business, a business that relies entirely on people borrowing their money and then paying it back with interest. Debtors keep the economic system afloat. In Robbins’ words, debtors are cultural heroes. So in a debt strike, the heroes would use their now-realized power and refuse to make the villains more money. The strikers have the money to make payments, but they’re choosing to ignore the payments — at least until their demands are met.

Hearing all this inspired me. Then it concerned me. What about my credit rating? In a perfect world, that wouldn’t matter, but in our credit-driven world, it does. If the strike goes as planned and a good 20 to 25 percent of debtors participate, Robbins says, no one can be penalized. That would be absurd. The number would be too vast, and creditors don’t want to ruin their customers’ credit, especially the ones who can afford to pay back their debt. He reminded me: They need us.

He also reminded me that he isn’t the first to propose this idea. When Republicans in Congress threatened to not extend the debt ceiling last year, they were proposing a debt strike — on a big-boy, national scale. “If U.S. Congress and senators can propose a debt strike to get what they want, then it certainly becomes a legitimate strategy,” Robbins emphasizes.

A debt strike isn’t so far-fetched after all. When I asked Robbins how long we’d have to strike, he said he couldn’t see it lasting more than four months without having enough effect on the economy to grab the attention of banks and the government.

Once we have their attention, the negotiating begins. In short, Robbins suggests we change how our current financial system works. Our current system destroys the environment, serves some more than others, and centralizes political power. “The problems that most people recognize as significant really cannot be dealt with in isolation from our financial system,” Robbins explains.

To start, he recommends creating more public banks, where governments loan money and return the interest to the public by spending it on the same things we pay taxes for. The United States has only one right now, the Bank of North Dakota, but countries like Brazil, China, and India have major public banking sectors. He doesn’t say to get rid of private banks altogether but to have public ones running parallel to them. Right now, private institutions issue our money. They collect interest, which Robbins says amounts to some 15 to 30 percent of the national economy, so they become richer and richer. Big money pays for political campaigns, and it buys a lot of power. As for the rest of us? We get left behind. That wouldn’t be the case with a public banking system. Our interest payments would be used for the public good. It would be from the people for the people — not from the people for the 1 percent. Oh, and no more income taxes. Our interest payments would take care of that.

I like how that sounds.

If the strike does indeed happen in October 2016, that would be right before presidential elections. “That would force candidates — if they’re speaking in public — to take a stance,” Robbins said. If the strike gains momentum as Robbins hopes, candidates could no longer ignore the 99 percent. Even better, the newly elected president could weave the requests of the strike into his or her presidency.

The idea of a strike should appeal to any candidate on the political spectrum, left or right — at least Robbins thinks so. The proposed strike would address income inequality, a focus of Bernie Sanders’ presidential campaign, and would aim to reduce taxes, an interest of Rand Paul’s campaign. Robbins is even planning on sending Paul a copy of his book once it is out. “There’s a lot in there that libertarians would identify with,” he says.

The strike would address issues that affect us all: inequality, environmental degradation, and our economy. Everyone should be able to identify with the strike, be they activists, people of faith, or even the 1 percent. Robbins says the 1 percent might be fine now, but their children won’t be — not if things continue as they are. The strike should invite people from all walks of life. I wonder if they would all participate.

Why not, though? “What you have to do comes down to simply doing nothing,” Robbins explained. “That’s why I say in the book: If people aren’t willing to do this to solve problems that they deeply care about, then they’re not serious about it.” Plus, it’s nonviolent, legal, and free. Robbins reassured me: “You don’t have to get beat up by the police. You don’t have to get thrown into jail. You don’t have to donate thousands of dollars to these causes. All you’ve got to do is not pay your debts. Simplest thing in the world.”

It all sounds rather enticing. What’s easier than doing nothing? The question remains: Will I strike? Sure, if I’m not the only one. When it comes to ignoring bills, that sounds rather lonely. It’s an “individualized action,” as Robbins puts it. I need to know that others are joining me. I need to be able to meet with them and discuss the cause. I wouldn’t mind starting some ruckus with some signs and rallies, either.

Robbins is planning to create a social media setup where people can find out about others involved. He and Di Muzio have also created a domain, debtstrike.org, which they plan to have ready by October 2015, when their book comes out. Once that happens, more people should know about it, and we can start organizing. I’m not the best planner, but I do know how to collaborate. If others can join me and help figure out a format where the party of the 99 percent can list its demands, I’m in. But I can’t do it alone.

The issues the strike addresses are ones I work every day to change. I try to do as much as possible to help the planet and the people in it. I attend protests when I can, whether I’m chanting or reporting. I shop local and organic when my wallet allows. I buy clothes and furniture from thrift stores to end our culture’s throwaway cycle. I would be a hypocrite to do all that and not take part in further direct action. I’d hope others would feel the same. Who knows? The strike may not work, but I do know that, at the very least, it’ll raise awareness.

So let’s start figuring this out. October 2016 isn’t too far off, and our debt isn’t going anywhere. Why not take a chance? I wouldn’t mind being a cultural hero. Would you?

Yessenia Funes is an assistant editor at YES! Magazine and a recent graduate of the State University of New York at Plattsburgh. Follow her on Twitter @yessfun.

Strength in Numbers Often faced with a choice of heating or eating, many Hudson Valley residents got behind on their utility bills. By sticking together, they’re keeping the lights on.

On her street of clapboard houses in Poughkeepsie, New York, Donna West was the lady with no lights. “That’s how people on the block know me,” said West. “But I’m not hanging my head in shame — no, Lord.” Broad-shouldered and with a soft expression, West and her three children have been living in the dark for months. They charge their cell phones at the laundromat. West and her daughter, Princess, who are both asthmatic, perform their nebulizer treatments at a neighbor’s home. In the early mornings, West heats water on the stove so the kids can take lukewarm baths before school. Princess even invented a song to cut through the darkness:

Laura Gottesdiener is an award-winning investigative journalist, author, and producer. The author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home, she is currently a news producer at Democracy Now! Her work has appeared in Playboy, Rolling Stone, Al Jazeera, Mother Jones, and Tom Dispatch.

We have no lights
at 2 Gray Street.
When you come in our house,
you cannot see.
You will fall down the stairs,
like I did yesterday…

The problem was that Central Hudson Gas & Electric Corp., the monopoly energy provider for the city of Poughkeepsie and two counties in the Mid-Hudson River Valley, claimed that West owed an outstanding balance of $12,882.26. It was a figure so shocking to West, who had been paying the utility company between $100 and $200 each month consistently over the last 16 years, that she carried around her bill in her purse. “I have to show people my bill because they don’t believe me,” she said.

West is one of the newest members of Nobody Leaves Mid-Hudson, a Poughkeepsie housing rights organization that has set its sights not on JP Morgan-Chase or Fannie Mae but on a local corporation saddling residents with housing-related debt: the privately owned utility company Central Hudson Gas & Electric Corp.

Nationally, energy utility companies’ rates have been rising throughout the last decade, and Central Hudson is no exception. On July 1, Central Hudson imposed a dramatic rate hike: a 7 to 9 percent increase for electricity and a 5 percent increase for gas. For many across the Mid-Hudson River Valley, energy costs were unaffordable even before these increases. From mid-2013 to mid-2014, the company cut off energy from more than 10,000 households, including West’s, for lack of payment.

When most people picture debt, they think about foreclosures, student loans, and outlandish medical bills. But for an increasing number of Americans, the soaring cost of energy is also pushing families deeper into the red.

“People are going without food and medicine to try to pay their utility bills,” said Jonathan Bix, an organizer with Nobody Leaves Mid-Hudson. “People are choosing between heating and eating, and a huge amount of people are still falling into debt and getting their power shut off.”

In fact, a study by the Center for Financial Services Innovation found that utility bills were the number one reason people were forced to take out short-term loans such as payday loans, causing a debt trap that Poughkeepsie resident Mary Grace Wyckhuyse, another member of Nobody Leaves Mid-Hudson, knows well. In 2012, she was living in Las Vegas with her children and working at a call center for — of all things — an energy company. Yet, with the call center’s commission-only pay structure, her own utility debts were mounting. Finally, she borrowed $300 from Dollar Loan Center, a storefront payday lender, to keep her lights on.

“I got the utility paid off but not the loan,” she said.

With the high interest rate, the debt ballooned and soon went into collections, leaving her to contend with a barrage of calls from collectors and a hit to her credit.

For nearly 20 years, Central Hudson has operated more or less unchallenged — until Nobody Leaves Mid-Hudson came along. First emerging as an anti-eviction working group of the 2011 Occupy movement, the group spun off into its own organization and soon began supporting homeowners fighting foreclosure with guidance from the longtime housing-rights group City Life/Vida Urbana in Boston and the national umbrella group Right to the City.

In the summer of 2013, Zakiyyah Salahuddin, a longtime community organizer in Poughkeepsie and one of the group’s key members, brought another issue to the table: utility bills.

“I knew a lot of families who were hurting,” she explained.

Plus, she’d lived the problem personally. Salahuddin had been shut off at least four times by Central Hudson over the years. Once, she watched a whole refrigerator’s worth of newly bought food spoil. Another time, her heat was shut off in the dead of winter. “You see your breath in the house,” she said. “You get pneumonia. And then you’ve got a doctor’s bill, too.”

As other members shared similar experiences, the organization decided to launch a new campaign called “People’s Power.”

Nobody Leaves began canvassing neighborhoods and flyering at the Social Services office. The number of members swelled — each with their own story. One man lived in a small two-room trailer, yet his monthly bill often topped $200. Another woman moved into a new apartment in January and owed $3,000 by March. Member Tanya Barber, who lives with her 1-year-old grandson, was threatened with shut-off after she missed one payment on her payment plan. “I tried to explain to them there was a baby in the house,” she recalled. “And their response was: ‘I don’t know what to tell you. You reneged on your agreement.’ ”

Central Hudson declined to comment on specific cases for this piece but said, “We are sympathetic to the difficulties that many customers face due to difficult economic conditions, and we work with them to the best of our ability to keep their accounts current.”

After hosting a utilities rights clinic and a massive membership meeting, the group escalated their actions. In early March, dozens marched to Central Hudson’s headquarters to demand a meeting with the company’s CEO. A few days later, the group flooded a public hearing about the rate hikes, where member Angela Newman testified.

5 Things Creditors Wish You Didn’t Know

5 Things Creditors Wish You Didn’t Know

Tony Manno and Alexa Strabuk

1) They will negotiate on how much you owe.

Creditors will try to scare you into doing what they want. The key is to stand your ground. When negotiating, be prepared to pay a lump sum. Creditors won’t usually accept less than 50 percent of the amount owed, but if you can offer to pay the lower amount while you have someone on the phone, chances are they’ll accept it. Note that this will probably hurt your credit rating, but at least you’ll pay less.

2) You, the consumer, can hold them accountable.

Ensure that as much communication as possible between you and your creditors is written, and create an archive of it all. That way, they won’t get away with making empty threats about money you don’t owe. If creditors send demands via mail, make sure to write back asking for the original bill, the one that created the debt in the first place. The people who actually reach out to you are often third-party collection agencies, not the primary creditors. These agencies are required by law to show you where the debt came from. Make them prove that you owe that money.

3) You can send a cease and desist letter.

You have the right not to converse with your collectors. Harassment by collectors can be significantly reduced by issuing a cease and desist letter via certified mail. While this tactic is useful in preventing persistent phone calls or aggressive negotiations, be sure that at least one line of communication remains open (through postal mail, for example) to prevent a collection agency from resorting to a lawsuit. Be wary of any attempts by collectors to disguise their identity: With any correspondence, they are required under the Fair Debt Collection Practices Act to provide you with a mini-Miranda to declare that they represent a collection agency.

4) Statute of limitations runs out on old bills.

Familiarize yourself with the laws and regulations that are designed to protect you. Look up the Fair Debt Collection Practices Act, the Truth in Lending Act, and the Fair Credit Reporting Act—and research the statute of limitations in your state. For example, in California, oral contracts are valid for two years while written ones last four. After a certain number of years, creditors lose their chance to take you to court at all. Though they can still attempt to collect after the statute of limitations has passed, they cannot do so by filing a lawsuit against you.

5) There is strengh in numbers.

Consumer debt burdens are often stratified along socioeconomic lines. Many of your neighbors are likely experiencing similar exchanges with aggressive creditors as a result. To share these experiences and develop a collective response, you can organize a debt assembly in your community. These public forums allow debtors to gather and discuss the effects of debt in their lives, how to manage it, and how to resist. Already held in cities like New York and Oakland, assemblies open avenues for free legal counsel and allow debtors to organize in a space free of the social stigma often associated with debt.

At 59, Newman suffers from congestive heart failure, chronic obstructive pulmonary disease, and asthma, for which she requires daily breathing treatments. She explained to the audience that she had applied for Central Hudson’s Life Support Program, offered to those who require electricity for necessary medical equipment, but was denied because she needs her electronic nebulizer four or five times a day — not a constant 24 hours. Shortly afterwards, Central Hudson abruptly cut off her electricity while Newman was in the middle of her morning breathing treatment. “I breathed about two puffs, and the machine stopped,” she recalled. “Everything just went off.”

She rushed to the hospital. On arrival, she called Central Hudson before receiving care “because that’s when they wanted their money.”

When Newman recounted this story at the public hearing, she wasn’t the only one crying.

Nobody Leaves is demanding the company expand its assistance program, strengthen the protection policy to prohibit any shut-offs of homes with children 12 years old or younger during the winter months, and release data on who is being shut off. Nobody Leaves Mid-Hudson is also exploring possible models of collective bargaining with Central Hudson, as well as ways to move toward the long-term vision: publicly owned, publicly run utilities companies.

The group has also pledged an internal commitment to its members: Once someone becomes a member of Nobody Leaves, she is joining a “Shut-off Free Zone” — meaning the group will ensure that all its people have power.

The “Shut-off Free Zone” pledge is reminiscent of that of the Spanish grassroots anti-foreclosure group PAH, the Plataforma de Afectados por La Hipotecas. According to organizers, PAH promises its members that once they join, they’ll never be homeless. After all, utility shut-offs are akin to foreclosures in that both act as debt enforcement mechanisms. To build serious movements to resist debt, then, groups such as PAH and Nobody Leaves must be able to offer protection against the collectors’ form of punishment — whether that’s eviction or having the lights shut off.

In Spain, the strength of this type of pledge — refreshing in its practicality and radical in its autonomy — is now on full display: The widespread PAH movement helped lay the foundation for the left-wing electoral insurgency that won the Barcelona and Madrid municipal elections in May and could also provide the political groundwork for the election of the left-leaning Podemos party in December’s national elections.

Neighbors and members of the Shut Off Free Zone: Donna West, Mary Grace Wyckhuyse, and Angela Newman. Far right is organizer Jonathan Bix of Nobody Leaves Mid-Hudson.

On the Saturday of Memorial Day weekend, Donna West joined Mary Grace Wyckhuyse, staff organizers Spencer Resnick and Jonathan Bix, and volunteer Rosemary Lopez to help canvass West’s neighborhood.

“Sign this for me?” West asked her across-the-street neighbor, pointing to a petition of signatures opposing the summer rate hike. The woman extended her hand for the clipboard.

At West’s house, Princess was repainting the front steps a periwinkle blue.

“We’ve got to work with what we have,” West said, commenting on the bold color selection.

Sometimes, when all you have are your neighbors, that’s more than enough.

With the help of Nobody Leaves, West filed a complaint with the Public Service Commission, the state utility regulatory agency, about her outsized debt.

As a result, in early June, Central Hudson was forced to restore service to her home — the latest in a string of nearly a dozen victories in the group’s efforts to ensure that all of its members have service. As the electricity flickered on that Monday morning, Donna West went from being the lady on the block with no lights to the woman in a movement with power.

Laura Gottesdiener is an award-winning investigative journalist, author, and producer. The author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home, she is currently a news producer at Democracy Now! Her work has appeared in Playboy, Rolling Stone, Al Jazeera, Mother Jones, and Tom Dispatch.